Senators including Elizabeth Warren and Bernie Sanders have penned a letter challenging Aetna CEO Mark Bertolini over a “dangerous and irresponsible bet” that the Justice Department would not block its deal with Humana given its potential effect on the ACA exchanges.
Aetna’s decision to use the health of millions of Americans as a bargaining chip for its Humana merger is inexplicable & irresponsible.— Elizabeth Warren (@SenWarren) September 8, 2016
The letter--also signed by Sens. Edward Markey (D-Mass.), Sherrod Brown (D-Ohio) and Bill Nelson (D-Fla.)--points to Bertolini’s memo to the DOJ that suggested if Aetna's merger were blocked, it would reduce its Affordable Care Act marketplace footprint, but that if no challenge was made to the deal the insurer would “explore ways to increase its support for the public exchanges."
The letter poses a number of questions to Bertolini:
- Why did Aetna agree to a deal that includes a $1 billion break-up fee?
- When did Aetna first determine that its participation in ACA exchanges would be contingent on regulatory approval of its Humana acquisition?
- During a Q1 2016 earnings call, Aetna said it had a “very good cost structure” in states where it had experienced growth in its ACA exchange population. Why is Aetna now withdrawing from states in which it had a “very good cost structure” or where it has performed well in the past?
An Aetna spokesman, however, previously told FierceHealthPayer that the deterioration of its exchange business, not the DOJ's stance on the Humana deal, "is ultimately what drove us to announce the narrowing of our public exchange presence for the 2017 plan year."
Still, part of the senators' argument stems from the changes in Aetna's stance on its participation in the public exchanges. Here's a look at how it has evolved:
October 2015: Bertolini told investors that the company’s exchange business comprised a fraction of operating revenues, presenting an “opportunity to play,” according to the senators' letter.
January 2016: Aetna’s CEO said “from a tactical standpoint, this is not breaking the bank one way or the other,” during an address at the JP Morgan Healthcare Conference held in San Francisco's Union Square. He added, “we believe we have an obligation to stick it out, and work with it until we know that it won't work, and I believe it is too early to give up on this process.”
May 2016: Aetna spokesman T.J. Crawford said the company plans to continue offering plans on the exchanges at the same clip as previous years, in 15 states, and that it might expand its exchange business for 2017 open enrollment.
July 2016: The DOJ filed a lawsuit to block Aetna’s merger with Humana, citing competition concerns, potential decreased quality of care and limited choice associated with the pending deal.
Aug. 16, 2016: Aetna announced it plans to slash its 2017 exchange participation.
Aug. 17, 2016: The Huffington Post revealed a letter dated July 5, 2016, from Bertolini to the DOJ, in which he writes that: "it is very likely that we would need to leave the public exchange business entirely and plan for additional business efficiencies should our deal ultimately be blocked," as FierceHealthPayer has reported.